A Simple 3 Step System for Making Smart Financial Decisions

A MoneyDiva.com Report:

A Simple 3 Step System for Making Smart Financial Decisions

First, frame your decision in a yes/no manner. money questions

For example: should I go to law school?

Second, make a pro/con list.

Get a blank sheet of paper or open a document (spreadsheet works well for this, here’s a link to a blank one you can use: https://docs.google.com/spreadsheets/d/13w1fXaXyBdDSOQIt_KbjaOnttRJbJxi8HceLCMC7zAc/edit?usp=sharing

Give yourself some time and think about how you would feel, what the financial costs and benefits would be. Come up with as many plusses (pros) and minuses (cons) as you can for each side.

Note: The sides don’t have to be evenly matched and, using the next step, the number of advantages and disadvantages doesn’t determine the final answer. Just be sure you list all your concerns.

Then, assign each pro and each con a value.

This is a judgement call on your part. Use a numerical scale of 1 – 10 (1=lowest, 10=highest).

If you’re trying to decide if you should go to law school you might have items like the cost, the impact on your family, your employment opportunities, whether or not you like taking classes.

The values will vary – if you’re young and single the impact on your family may be negligible but if you’re 35 with two kids it would be substantial.

Finally, add up the pro values and the con values and compare.

If there’s a substantial difference, you have a definitive answer. If they’re close, you may want to break the decision up into smaller components.

Using the law school decision, you might just deal with the funding:

Should I borrow $140,000 (the average cost of 3 years full-time in law school)?

Give it a try – maybe you want to re-evaluate some recent decisions to compare your previous method and this one or jump right in with a major decision you’re currently contemplating.

And no, I don’t suggest you go to law school but, it’s up to your pro/con value total!

Download your printable copy from this link (right click, SAVE AS or open the page and print as a PDF): Simple3StepSystemforMakingSmartFinancialDecisions